James Hunter

WRAM! Guaranteed profits for SJW Corp. and others

WRAM! Guaranteed profits for SJW Corp. and others

Since I noted the "ambiguous" position stated in Catherine J.K. Sandoval, CPUC Commissioner's Amended Scoping Memo and Ruling, on March 3, 2013, page 3, in an earlier posting.

"Also, since SJWC already has a Monterey style WRAM and Incremental Cost Balancing Account in place, it is not apparent how instituting a new one at a later date (which may or may not occur) would complicate its institution."

I attempted to determine if there was a CPUC policy statement, to my surprise there is a clear statement that supporting the implementation of WRAM's. Interestingly it was the very last page in Appendix B,  
 CPUC Next Steps and Short-Term Objectives, CPUC has published this and other information, in the Water Action Plan, October 28, 2010.

Let's look at the specific wording:

General Rate Cases (A.05-08-006-013) Cal Water Service) 
1. Decoupling of sales from revenues to eliminate the disincentives for conservation

Another way of saying this is customers (ratepayers) would pay for any  inefficiency of SJWC, protect them from having to reduce expenditures during economic downturns and in the event we further reduce our water usage we would pay more for the reduced amount we would use.

SJWC filing during the rate case:

It appears that the final ruling on the SJWC may be along the lines, as follows:
  • A lower rate increase but higher than DRA recommends
  • Added funds to improve Security, Preparedness and Terrorist Protection. (Would it be really needed?)
  • A full WRAM decoupling profits from actual revenues
This will mean that SJW Corp. will be guaranteed revenues and the battle will shift to the percentage rate used, ROE determining the CPUC controlled profit. The argument will be the ability to raise capital for building infrastructure, which will mean more investment in staff and facilities. We the ratepayers are at a disadvantage we get to pay for the Sr. VP ($600K/year) and staff who spend 40 hours a week to increase the revenue to SJW Corp. from San Jose Water Company, based on the water rates we pay!

If your concerned please do the following:

Send email to CPUC at:

District 5 United eForm eMail  Simply click on the "eForm eMail" and you will get a page to fill out the information and specify the reason for your opposition to the SJWC 44% Rate Increase and the possibility of SJWC getting to use a full WRAM.


CPUC Public Advisor,  public.advisor@cpuc.ca.gov  The Public Advisor will insure your email will be sent to the appropriate CPUC staff members.

"WRAM is Water Revenue Adjustment Mechanism and it decouples a water companies (example SJWC) revenue from it's ratepayers water usage. We are guaranteeing the revenue of effectively a regulated water utility as well as the public company SJW Corporation that owns San Jose Water Company.

American Water Intelligence article "Decoupling (WRAM) gets mixed reviews in CA four years on", states "Our opinion in general is that these mechanisms give the investor-owned utilities too much protection,” Brooks said. “They go beyond removing the disincentive to conserve, but they are also shielding the utilities from declining revenues due to other factors like the economy or the weather.”

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